Atos Healthcare
11:00 am
Tom Greatrex (Rutherglen and Hamilton West, Labour)
I will not, because I need to make progress. I apologise to my hon. Friend.
The second impact of the high appeal success rate is cost. The cost to the public purse from appeals relating to the WCA was £60 million in 2011-12. As I said, that figure has more than doubled since 2009-10. It is almost 50% of the total yearly value of the Government’s contract with Atos Healthcare to carry out the assessments in the first place. In effect, taxpayers are paying for the process not to work, and then to correct it. Given the unprecedented pressures on the public purse, it beggars belief that the Government are apparently content to sit back and do very little to rectify that situation.
In oral evidence to the Work and Pensions Committee in June 2011, the Minister claimed that if the migration of those on incapacity benefit to ESA was successful, it would save money. He said that the aim is not a
“savings measure—it is not a financially based exercise, although clearly if we succeed it will save money”.
The Minister appeared to accept that an indicator of success was saving money, so does he accept that the significant increase in costs associated with the number of decisions being appealed—and being successfully appealed—shows that, on that measure, the Government have failed?
One measure that I and many others have been questioning is the imposition of financial penalties on Atos Healthcare to compensate for poor performance. In February, in response to my written question on whether the Government had considered imposing such sanctions, the Minister appeared to absolve Atos of the blame for the number of decisions overturned on appeal by saying:
“it would not be appropriate to impose financial penalties on Atos to reflect the number of work capability assessments which are overturned on appeal.”—[Hansard, 22 February 2012; Vol. 540, c. 852W.]
I tried again in July by asking for a note of when penalties had been imposed and what their total value was, but that time, rather than absolving Atos of blame, he decided to protect the company’s commercial interests, replying with the frequent defence of “commercial sensitivity” as the reason for withholding that information. I find it difficult to understand how commercial sensitivity comes into play when we are talking about a single company that is paid from the public purse to carry out an exclusively public function on behalf of a Government Department. Transparency would help to ensure that there could be confidence in the system and to highlight where performance was not being properly managed. It is important that the Minister seeks to address that.
It was not until the NAO responded to me last month that some light was shed on the issue. It said:
“We do not consider that the current contractual targets are sufficiently challenging, and in our view this allows the contractor to deliver a significant number of assessments before financial penalties become due.”
It continued:
“Our review also concluded that the Department has not sought adequate financial redress for contractor underperformance.”
One of the most concerning revelations from the NAO was that in only 10% of the cases in which financial penalties could have been imposed did the Government do so. That is astonishing. Given that the Government and the Minister quite frequently comment on the
importance of value for money for the taxpayer—in some respects, I agree with that—it beggars belief that when there are opportunities to put that into practice, the Government have done so in only one in 10 cases.
I quote:
“In these times of tight budgets, we need to make sure the money we do spend is better spent. If we don’t we are failing disabled people and their families.”
Those were the words of the Prime Minister in 2009 at a conference on autism. In that same speech, the then Leader of the Opposition cited a NAO report that examined value for taxpayer money in relation to autism. I am sure that, even given his elevation today, the irony is not lost on the Minister.
There are many questions that the Minister must answer to account for the failure properly to manage the contract with Atos Healthcare. Why did he impose financial penalties on only 10% of the occasions on which they could have been triggered? What was the total value of compensation clawed back from Atos Healthcare to reflect that poor performance, and what was that as a percentage of the cost to the public purse for the original contract and appeals? Does he agree with the NAO that current targets that trigger financial penalties are not sufficiently challenging? What are the key performance indicators that the NAO described as insufficiently challenging? That is a particularly important issue.
On a number of occasions, I have attempted to gain clarity on what is expected of Atos in relation to customer service, the number of assessments conducted, the number of people found fit for work, targets, statistical norms and many other issues. The Minister has refused to be fully transparent, releasing a very limited excerpt from the medical services agreement with Atos that relates only to waiting times. As I said, maximum transparency is important to enable people here to hold the Government properly to account, and to hold Atos Healthcare, through the Department for Work and Pensions, properly to account for the work that it is undertaking in a very important area.
The NAO was also scathing about the Government’s failure properly to monitor the performance of Atos. According to the NAO, there is
“Limited routine validation of information provided by Atos Healthcare”.
It went on to recommend that
“the Department develop processes to validate key performance information supplied by Atos Healthcare.”
Back in February, in the previous debate on the issue, the Minister stated, with a certain degree of confidence:
“On capacity issues, as we stand here today, the incapacity benefit reassessment is on time. New claims for ESA have fallen a bit behind, mostly because of the introduction of the personalised statement…We discovered in the first few weeks that it took health care professionals…longer to complete the statement than expected, so the number of completed assessments dropped. That has changed. They have caught up again, and we are chasing through to clear the backlog, as we are doing with the appeals backlog”.—[Hansard, 1 February 2012; Vol. 539, c. 292WH.]
Unfortunately, the evidence does not bear out that assessment.
The target waiting time from when the ESA50 form is issued to the claimant to when Atos Healthcare completes the work capability assessment and hands the case back to the DWP is 35 working days—seven actual weeks.
Between September 2009 and August 2010, the target was met with a clearance rate of 33 days, yet in the space of less than two years, not only has the target not been met by an astonishing margin, but the length of time sick and disabled people have to wait for their assessment has risen by 85% to 61 working days, or more than 12 full weeks.
More than 20,000 people are waiting more than 13 weeks for a work capability assessment. The reason the Minister gave was:
“Atos Healthcare’s ability to deliver a service within the AACT was also impacted by the service volumes for this period which were significantly above departmental forecasts; in addition Atos had recruitment demands/challenges. These issues…resulted in an increase in the AACT.”—[Hansard, 9 July 2012; Vol. 548, c. 51W.]
Atos Healthcare receives more than £110 million a year to deliver a contract, but is unable to meet its recruitment needs to deliver it properly. That, at best, is an example of the underperformance and the level of failure due to which the Government should ensure that financial penalties are brought against Atos Healthcare. Such contractual failure feeds directly into the experiences that I am sure we will hear about in the remainder of the debate. Many people across the country have found themselves waiting an excessive time for their assessment. They are under pressure and feel hounded, and they may well wait a significant period for the appeal to follow. A degree of the chaos in the system is caused by the Government’s decisions and the failure to hold Atos properly to account.
This is not the first time that recruitment challenges at Atos have been highlighted as reason for failure. In December 2011, the Minister advised that a key Harrington recommendation would not be implemented beyond the pilot stage due to capacity pressures at Atos. In less than a year, the Government have twice cited the failure of Atos to recruit enough staff as the reason why those undergoing the WCA are being short changed, which gives rise to a question: if the Government are content to blame Atos, why has the Minister spectacularly failed to do anything about it? Why, on the one hand, in his answer to written questions, does he lambast Atos when waiting times increase, and yet, on the other hand, sit on his hands when it comes to making the company pay financially for its underperformance?
In 2010, the average WCA customer journey was 36 working days. That rose to 44 working days in the first half of 2011, and increased still further to 53 working days in the second half of 2011. Unfortunately, 2012 brought more misery for ESA claimants, as between January and May, the average customer journey increased to 64 working days, or just under 13 weeks. The Minister inherited 36 working days and transformed it into 64—an increase of 78%. It might seem that I am talking about the dry detail of contractual issues, but we see the defects at the heart of the process—the failure of the management of the DWP and the failure of delivery at Atos—reflected in the experiences of many people we represent.
I want to say a few words about the award of the £400 million contract for the personal independence payment in many parts of the UK to Atos Healthcare.
A further criticism in the NAO review, which interestingly enough was dated the same day as the announcement of the PIP framework agreement, was about medical services contracting. The NAO stated specifically in relation to the PIP procurement process:
“Our review of existing arrangements concluded that the Department needed to make changes to secure effective leverage over future medical services contracts...we have recommended that the Department focus on reducing the barriers for new suppliers to making a sustainable entry to the medical services market, in particular addressing the current risk that a single incumbent supplier has significant cost advantage which makes delivery of a level playing field in the market more challenging”.
The NAO went on to lament the DWP’s
“dependence on a sole national supplier”
that has
“limited opportunities for routine assessment of value for money, for exercising contractual leverage and for wider market development.”
Like many Members in the Chamber who represent constituencies within the areas for which Atos Healthcare will undertake the PIP assessment process, I received a letter from Atos confirming that it had been successful in securing the contract. It included the chilling phrase that it had won the contract on the basis of its record delivering assessments for the Government over a period of years. This is a serious point, because as the PIP process is established, it is vital that some of the problems encountered in the WCA are not simply repeated. There is concern that there is an increasing risk that that will be exactly the case, given the chosen contractor.
Contractual arrangements, performance measures, penalty clauses, and monitoring and delivery failures are technical, dry and dull matters, especially when contrasted with the sometimes heartbreaking and tragic cases that I have heard about, not only from my constituents, but from many of those who have contacted me prior to the debate. Many of those experiences are due to the flawed delivery of the WCA and the record of Atos Healthcare.
Whoever is the responsible DWP Minister tomorrow afternoon, we need a process that works in the interests of taxpayers, and of individual claimants and applicants. We need a process that is comprehensive enough to encompass complex conditions and that recognises that it is a waste of time and money to keep reassessing people with progressive and incurable conditions, while also recognising the fluctuating nature of many other conditions—that people have good days and bad days. We need a process that appreciates the very difficult challenges of assessing mental health needs and that takes account of expert medical evidence much more fully than the current process, particularly in some of the cases we have heard about. We need a process that does not make blanket assumptions about the time it takes to recover from very serious illnesses, such as cancer, nor imposes blanket conditions as a result. We need a process that helps people who can work and does not hound those who cannot.